Heliad Equity Partners (Heliad) revealed today that it will sell most of its shares in Heliad’s portfolio company SLEEPZ AG, a German e-commerce group focused on sleep products. Heliad will recognize an €8.1m write down on the investment, which will increase its FY18 net loss to €56.7m, compared with preliminary net loss of €48.6m released on 22 February 2019.
Together with Heliad, other significant shareholders will sell their shares in SLEEPZ to the WAOW Group. It is worth noting that Heliad and other SLEEPZ’s creditors have decided to waive their claims for the repayment of loans and the convertible bond in full, against granting a debtor warrant.
In the first nine months of FY18, SLEEPZ’s sales declined from €8.8m to €7.9m and net income stood at a negative €3.7m vs. negative €2.9m in the comparable period of FY17. According to the company, its business performance was adversely affected by strong competition on the mattress market, leading to a decline in margins. Back then the company did not expect that the price war would ease in the medium-term, even though some of SLEEPZ’s competitors exited the German market or became insolvent.
In the last few months, SLEEPZ has undertaken several capital measures to improve its balance sheet position. In October 2018, the company entered into a €5.0m funding agreement with Heliad and Apeiron Investment Group. This included a private placement of €2.0m convertible bond and a €3.0m long-term loan.
SLEEPZ has also issued 5.3m shares in exchange for contributions in kind for the acquisition of shares in URBANARA GmbH, an online shop for home accessories, based on a valuation of €1.20 per share for SLEEPZ. Consequently, SLEEPZ’s capital increased from €12.4m to €17.8.
At the end of FY18, SLEEPZ further increased its capital to €18.7m in a private placement by issuing 892k shares at an issue price of €1 per share.